Reevaluating your payroll withholding from the previous year each tax season is a good practice we recommend to our clients. If you typically owe a large amount or have a large refund when filing your taxes, adjusting your withholdings is especially important. While you may like the idea of receiving a large tax refund, in reality you're giving the government an interest-free loan.
Work with your tax advisor and spouse to determine how much income you expect to have for the year and consequently how much tax you may owe. Your tax professional can help you fill out a new Form W-4, Employee's Withholding Allowance Certificate, in which you will claim the number of allowances that correspond with the proper amount of withholding. Afterwards, you'll need to give the W-4 to your payroll department. The Form W-4 can be filed at anytime that makes sense for you and your family.